In February 2026, software stocks collapsed all at once. The fear was that if AI agents do the work in place of people, the subscription model of charging per user would start to crumble. A Jefferies trader reportedly gave the scene a name: the SaaSpocalypse.
✦ Three Numbers Behind the Crash
Reuters reports and a Gartner estimate
According to Reuters, the sell-off in the first week of February wiped roughly $1 trillion off the market value of software stocks, and as of February 13 the S&P 500 software and services index had lost about $2 trillion since its peak last October.
Gartner estimated that up to $234 billion in enterprise application software spending through 2030 could be put at risk by agentic AI.
According to reports on a review of Reddit threads, while the institutions were dumping, Reddit's retail investors often named Microsoft, ServiceNow, Intuit, CrowdStrike and Adobe as buy-the-dip candidates.
The Reddit thesis has three parts: AI cannot replace software in one stroke, incumbents will adapt, and valuations have already come down.
Let's check how right that view was as of the October 2 close (Yahoo Finance; year-to-date figures are rough, measured against the December 31, 2025 close), stock by stock.
✦ Report Card: The Five Reddit Picks
October 2 close (Yahoo Finance). The arrow shows the year-to-date change, measured roughly against the December 31, 2025 close.
CrowdStrike Holdings (CRWD, Nasdaq)
CrowdStrike is a cloud-based security company that protects corporate computers and servers from hackers.
Its core platform, Falcon, uses a lightweight sensor to collect security data, while AI models running on the sensor and in the cloud help detect and stop attacks.
CrowdStrike closed at $270.04, up about 130% year to date, and set a new 52-week high. A 4-for-1 stock split took place in July, so adjusted for the split, the February 24 close (an actual pre-split close of $350.25) works out to $87.56.
From there the stock has roughly tripled. Of the Reddit picks, it is the biggest success. Anyone who held CrowdStrike must have made a big profit. (Nice!)
The investment point is the logic that more AI means more demand for security.
CEO George Kurtz has been saying, in essence, "To secure AI, organizations need the Falcon platform." The more AI agents roam through corporate systems, the more there is to protect.
✦ CrowdStrike: Price Targets vs. the October 2 Close
Average is MarketBeat (51 analysts); broker targets as of the dates shown
| Analyst / source | Target | vs. close |
|---|---|---|
| October 2 close (baseline) | $270.04 | - |
| TD Cowen (10/2) | $280 | +3.7% |
| Stephens (9/18) | $280 | +3.7% |
| Morgan Stanley (9/21) | $254 | -5.9% |
| Average (MarketBeat, 51) | $227.17 | -15.9% |
| Bernstein (9/17) | $132 | -51.1% |
The caution is that it has already risen too much. According to MarketBeat, the average price target of 51 analysts is $227.17, 15.9% below the baseline price.
On October 2, TD Cowen raised its target from $250 to $280, but Bernstein issued a $132 target with a Market Perform rating on September 17.
Intuit Inc. (INTU, Nasdaq)
Intuit is best known in the U.S. for TurboTax, a tax filing program, and QuickBooks, an accounting program for small businesses. Its strength is the tax and accounting data it has built up on many individuals and business owners through those two programs.
Intuit closed at $281.08, down about 57% year to date. That is 58.5% below its 52-week high close (adjusted close basis, $677.03 on October 27, 2025), the deepest drop of the five stocks.
The heart of the problem is TurboTax. Doubts have grown over whether anyone needs pricey tax software in an age when AI like ChatGPT can file your taxes for you.
At its May 20 earnings release, Intuit said it would cut 17% of its staff, about 3,000 people, and it also lowered its annual TurboTax revenue forecast. BofA cut its price target to $360, saying TurboTax is losing share to cheap AI tools.
✦ Intuit: Price Targets vs. the October 2 Close
Average is MarketBeat (31 analysts) and includes old high targets
| Analyst / source | Target | vs. close |
|---|---|---|
| October 2 close (baseline) | $281.08 | - |
| Jefferies (9/18) | $500 | +77.9% |
| Average (MarketBeat, 31) | $431.55 | +53.5% |
| Mizuho (9/18) | $430 | +53.0% |
| RBC (10/2) | $385 | +37.0% |
| BofA (9/18) | $360 | +28.1% |
| Goldman Sachs (9/24, Sell) | $304 | +8.2% |
Even so, results were not bad: fiscal fourth-quarter earnings per share of $4.03 beat the $3.58 expected. MarketBeat's average target from 31 analysts is $431.55, 53.5% above the baseline price, but old high targets are mixed into that panel.
Goldman Sachs kept a Sell rating with a $304 target on September 24. Cheapness alone is not a reason to buy when the outcome of the AI competition is this unclear.
Adobe Inc. (ADBE, Nasdaq)
Adobe is known for Photoshop, Illustrator, Premiere Pro and its PDF software.
Its main business is Creative Cloud, which designers and video creators pay a monthly fee to use, and its strength is that it built its image-generation AI, Firefly, directly into those programs.
✦ Adobe's CEO Handover, Step by Step
In chronological order
Adobe closed at $237.69, down about 32% year to date and 34.0% below its 52-week high close (adjusted close basis, $359.91 on October 28, 2025).
On March 12, Shantanu Narayen said he would step down as CEO, and on September 3 the company announced that Anil Chakravarthy was confirmed as his successor. From December 1, Chakravarthy becomes president and CEO, and Narayen moves to executive chair.
On September 4, the day after the announcement, the stock fell about 7% in the regular session.
The investment point is the buyback. Adobe authorized a $25 billion share repurchase through April 30, 2030, and as of August 28 there was $24.55 billion left, about 26% of its market value.
Narayen explained that annual recurring revenue from AI-first products such as Firefly more than tripled in the first quarter from a year earlier.
✦ Adobe: Price Targets vs. the October 2 Close
Average, high and low are MarketBeat (33 analysts); broker targets as of the dates shown
| Analyst / source | Target | vs. close |
|---|---|---|
| October 2 close (baseline) | $237.69 | - |
| High (MarketBeat) | $440 | +85.1% |
| Bernstein (9/14, Outperform) | $373 | +56.9% |
| Average (MarketBeat, 33) | $282.68 | +18.9% |
| Goldman Sachs (Sell) | $200 | -15.9% |
| Low (MarketBeat) | $190 | -20.1% |
The caution is that the market is still not convinced. Of the 33 analysts on MarketBeat, 21 say Hold, 7 say Buy and 5 say Sell.
Bernstein reiterated its $373 target with an Outperform rating in September while Goldman Sachs kept a Sell rating with a $200 target, so analyst opinion is sharply divided.
ServiceNow, Inc. (NOW, NYSE)
ServiceNow is a company that lets businesses handle internal work requests in one place.
Its strength is a cloud platform that automatically routes things like IT outage reports and HR or customer inquiries through set steps (a workflow), and it is said that once large corporate customers adopt it, they rarely switch.
ServiceNow closed at $134.38, down about 12% year to date and 29.0% below its 52-week high close (adjusted close basis, $189.26 on October 27, 2025). It has traded on a 5-for-1 split basis since December 18, 2025, so these numbers reflect the split.
From its April 10 closing low of $83.00 it has gained 61.9%.
In an interview with Fortune just before its July second-quarter earnings release, CEO Bill McDermott said, in essence, that "AI thinks, but workflow acts." The message is that ServiceNow does not compete with AI models but aims to be the channel through which companies use AI.
Annual contract value from AI products has indeed passed $1 billion, and second-quarter subscription revenue grew 24.5% to $3.877 billion. Deutsche Bank named it its preferred stock for the next AI trade.
✦ ServiceNow: Price Targets vs. the October 2 Close
Average is MarketBeat; broker targets as of the dates shown
| Analyst / source | Target | vs. close |
|---|---|---|
| October 2 close (baseline) | $134.38 | - |
| Bernstein (9/9) | $248 | +84.6% |
| Cantor (9/21) | $174 | +29.5% |
| Average (MarketBeat) | $147 | +9.4% |
| Jefferies (10/2) | $140 | +4.2% |
| UBS (April, Neutral) | $100 | -25.6% |
The caution is the direct entry of AI model companies. On the same day, a report about OpenAI's enterprise product, Presence, helped drive the stock down as much as 6.5% at one point, before it rebounded in after-hours trading following the earnings release.
In April, UBS cut its rating from Buy to Neutral and its target from $170 to $100. MarketBeat's average target is $147, 9.4% above the baseline price.
Microsoft Corporation (MSFT, Nasdaq)
Microsoft is best known for Windows and Office (Word, Excel and more), and its cloud service Azure is now its biggest growth engine.
Its strengths are its investments in AI companies such as OpenAI and Anthropic and its sale of the Copilot AI assistant built into Office.
Microsoft closed at $517.53, up about 7% year to date. From its June 25 closing low of $352.83 it has rebounded about 47%. The trigger was the fiscal fourth-quarter results released on July 29: revenue grew 18% to $90.01 billion, and Azure growth was 43%.
Annual Azure revenue passed $100 billion for the first time, and the stock rose 15% the day after earnings.
The investment point is that it is the large cap that benefits most directly from AI investment. The results also included a $3.2 billion gain on its Anthropic investment, which showed how a stake in an AI startup shows up as profit.
But that was a one-time factor, so it should not be treated as profit that repeats every quarter.
✦ Microsoft: Price Targets vs. the October 2 Close
Average is TipRanks (36 analysts); MarketBeat's average is $571.18
| Analyst / source | Target | vs. close |
|---|---|---|
| October 2 close (baseline) | $517.53 | - |
| Wells Fargo (10/1) | $725 | +40.1% |
| Piper Sandler (9/30) | $610 | +17.9% |
| BofA (9/1) | $600 | +15.9% |
| Average (TipRanks, 36) | $578.69 | +11.8% |
| Redburn (9/21, Neutral) | $440 | -15.0% |
The caution is the Office business. The risk named in the Reddit review reports is the pressure that if AI cuts office jobs, the number of Office users falls too. Guggenheim judged in May that M365 commercial remained on track.
TipRanks' average target is $578.69, 11.8% above the baseline price; the highest is Wells Fargo's $725 and the lowest is Redburn's $440 (Neutral).
What Is the Future of Software Stocks?
Salesforce CEO Marc Benioff said in his Dreamforce keynote, "the SaaSpocalypse isn't about the end of software, but it may be about the end of software that makes humans do all the work." Nvidia CEO Jensen Huang said at the same event, "the end of software is nonsense." They are wise business leaders, so their words are worth trusting, but both are closely tied to the software industry, so their remarks may be biased.
Software stocks lagged the S&P 500, and the software ETF IGV reportedly posted its worst quarter since Q4 2008 in the first quarter of this year. So what comes next?
Will the companies that make software for humans to use all be eaten by AI and head toward their end? Let's watch how it turns out together.
This isn't investment advice. You know that, right? Protect your hard-earned money yourself.
Well then, shall we begin today's adventure?
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한국어 버전: 2026년 2월, AI에 밀려 폭락하던 소프트웨어 주식들.. 지금은 어떻게 됐을까?
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